As you learn the concepts and techniques of auditing

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Unformatted text preview: think of other ways you might obtain useful evidence. Rote memorization alone is not a good way to study auditing! Being a good auditor sometimes requires imagination and innovation. For example, a few years back an auditor was faced with figuring out how to verify a client’s assertion regarding the existence of inventory. The problem was that the “inventory” consisted of thousands of head of cattle on a ranch covering dozens of square miles. There was no standard procedure manual for the auditor to refer to—he simply had to figure out an effective and efficient way to obtain persuasive evidence that the cattle existed in the numbers asserted by the ranch’s management. In the end, the auditor decided to charter a small airplane to fly over the ranch and take photos—one per fifty square acres. The auditor was able to obtain a count of the cattle from the photos. He also evaluated veterinary records to see if the number of required annual vaccinations approximated the number of cattle counted in the p...
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.

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